5 Benefits to Having Builders Risk During Home Remodeling

Construction | Jan 25, 2018

Homeowners often believe their existing home insurance policy covers all exposures. Yet, remodeling builders risk insurance can offer coverage that is more comprehensive and protect clients from gaps they may not have known existed. Here are just five benefits to insuring your homeowner clients with a builders risk insurance policy when undergoing renovations:

Broad Eligibility

Residential remodeling insurance, like that available through the Builders Risk Plan insured by Zurich, offers coverage for a variety of projects and structure types. Whether clients want to perform a basic remodel (e.g. replacing kitchen tile), a minor structural change (e.g. replacing windows or doors), or even a major structural change (e.g. replacing or removing a load-bearing wall), they can get “A” rated protection for their project. Eligible residential structures include modular construction, custom homes, tract homes and more. Perhaps most crucially, remodeling clients who opt to rely on their homeowners policies typically do not get coverage for the existing structure. Many property policies have exclusions for damage to the existing structure if renovations were in progress at the time of loss, leaving those clients to bear the financial impact.

Comprehensive Coverage

Unlike some permanent property policies, clients renovating their homes with a home remodeling insurance policy have the option to include or exclude the existing structure. They also have access to coverage for the theft of building materials, property in transit, damage to installed flora (e.g. trees, shrubs, lawn and plants) and newly paved surfaces, property in storage, property owned by contractors, the expense of removing debris after a covered loss, and more.

Flexible Limits and Terms

Though limits and terms often vary by provider, clients have access to comprehensive policies for projects valued up to $75 million with the Builders Risk Plan insured by Zurich. In addition to coverages automatically included in our basic policy, US Assure also provides you the option to protect clients’ specific project needs with additional sub-limit increases. To ensure flexibility for the unpredictable nature of renovation, US Assure offers policy terms of six, nine or 12 months, with the option to extend.

Additional Coverages

In addition to the broad scope of coverages available through builders risk, your client has access to coverage for floods, earthquakes and more. Clients also have the option to purchase coverage for other losses.

We know contract change orders are likely during construction and your clients should call you to endorse the policy with the increase. If they forget to call and a covered cause of loss occurred, only those materials covered by the policy were protected. That leaves them with costly losses, and you with unhappy clients. With a contract change order endorsement, those new materials can be insured if a covered cause of loss occurs and the increased project value was not reported in time. Additional coverages include: soft costs and sustainable, “green” building materials.

Mitigate Claims Impact

Unlike clients who only have a homeowners policy in place, clients with builders risk policies have no cause to worry that their premiums or future coverage will change in the event of a claim. Whether your clients encounter a windstorm, fire or even theft during their remodeling project, they can get the protection they need with a builders risk policy.

Selling builders risk insurance coverage not only offers a variety of benefits to clients, it also provides you with more opportunities to earn revenue. There’s a good chance your homeowner clients are planning to renovate. In fact, according to CNBC, nearly two-thirds of consumers are planning to remodel their homes. Through builders risk, you have the opportunity to grow your business with both new customers and your existing client base.

Whether your clients are currently planning to remodel or in the future, the question of if their homeowners insurance will protect them during construction is bound to arise. Learn the answer to this question as well as what coverages clients may not even realize they need when you download Is Homeowners Insurance Enough? A Builders Risk Coverage Comparison.

This is intended as a general description of certain types of insurance and services available to qualified customers. Your policy is the contract that specifically and fully describes your coverage. The description of the policy provisions gives a broad overview of coverages and does not revise or amend the policy.

Is Homeowners Enough? A Builders Risk Coverage Comparison

Homeowners policies typically don’t cover the scope of exposures insured by residential builders risk. Those gaps can lead to financial implications should a loss occur. Read this guide to help you identify core differences between homeowners and builders risk insurance, and learn considerations for selecting the best option to protect your clients’ interests.

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